Modi govt puts brakes on India's universal health plan

Tuesday 31st March 2015 14:18 EDT

Indian Prime Minister Narendra Modi has asked for a drastic cutback of an ambitious health care plan after cost estimates came in at $18.5 billion over five years, several government sources said, delaying a promise made in his election manifesto.

Modi has had to make difficult choices to boost economic growth - his government's first full annual budget, announced last month, ramped up infrastructure spending, leaving less federal funding immediately available for social sectors.

The health ministry developed a draft policy on universal health care in coordination with the Prime Minister's office last year. The National Health Assurance Mission aims to provide free drugs, diagnostic services and insurance for serious ailments for India's 1.2 billion people.

The health ministry proposed rolling out the system from April 2015, and in October projected its cost as $25.5 billion over four years. By the time the project was presented to Modi in January the costs had been pared to 1.16 trillion rupees ($18.5 billion) over five years.

That was still too much. The programme was not approved, three health ministry officials and two other government sources said. Three officials said the health ministry has been asked to revamp the policy, but work is yet to start.

"The constraint on India's financial resources was conveyed to health officials, and even to those from other ministries," said one government official who is not from the health ministry but attended the meeting where Modi was present.

The meeting was held in January and the discussions were not made public. All of the sources declined to be named because of the sensitivity of the discussions. Officials at the prime minister's office and the finance ministry, as well as the health ministry, did not respond to requests seeking comment.

Modi's manifesto ahead of the election that brought him to power last year accorded "high priority" to the health sector and promised a universal health assurance plan. The manifesto said previous public health schemes, that have been mired in payment delays recently, had failed to meet the growing medical needs of public.

So health experts were dismayed when the union budget for the full-year starting April raised the allocation for the country's main health department only by about 2 per cent from the previous year, less than inflation. The meagre increase dimmed prospects for the massive health plan, they said.

"How can it happen when you have truncated resources?" one health ministry official asked.

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